Call Us Today! 1-877-425-2988

Watch This Video Now

The Sad Facts About America And Debt And The Need For Debt Consolidation Services

While our economy has strengthened somewhat over the past 12 months, all boats have not risen. In other words, not all of us have yet recovered from the one-two punch of the housing melt down of 2007 combined with the Great Recession that also began that year. Economists say that the Great Recession officially ended in June of 2009 but you'd have a hard time convincing many Americans that this is really true. For example, unemployment remains stubbornly high at 7.3% as of this past August. And more than 300,000 people have just stopped looking for jobs. Women's participation or the number of women actively looking for jobs has fallen to 57% (from a high of 60%) and men's' participation has dropped to less than 70%, which is the lowest number on records that go back to 1948.

The 10 states hit hardest by unemployment

All 50 states have seen high unemployment rates but some have been hit harder than others. Here are the 10 states that currently show the highest percentage of unemployment.

Nevada: 9.5%

Illinois: 9.2%

Rhode Island: 8.9%

North Carolina: 8.9%

Michigan: 8.8%

Georgia: 8.8%

California: 8.7%

New Jersey: 8.6%

District of Columbia: 8.6%

Tennessee: 8.5%

The Top 10 states with the lowest unemployment rates

Fortunately, there are some states that have weathered the unemployment storm and here are the 10 that have done the best.

North Dakota: 3%

South Dakota: 3.9%

Nebraska: 4.2%

Hawaii: 4.5%

Utah: 4.6%

Vermont: 4.6%

Wyoming: 4.6%

Iowa: 4.8%

New Hampshire: 5.1%

Minnesota: 5.2%

The top 10 states for bankruptcies

Given what's happened to our economy it's no surprise that most households continue to labor under a staggering pile of debt. In fact, we owe a total of of 11.13 trillion in debt and $849.8 billion in credit card debt alone. The average American household has $15,185 in credit card debt and average mortgage debt of $147,133. This has driven more and more people into bankruptcy as shown by the number of chapter 7 bankruptcies filed in the 10 worst states.

California: 157,557

Illinois 44,474

Florida 44,611

Michigan 32,194

Georgia 25,560

New Jersey 29,913

Arizona 26,668

Colorado 22,808

Ohio 22,005

Maryland 19,242

Why do people file for bankruptcy?

Why did so many people choose bankruptcy instead of paying off their debts? According to one recent study, there were five main reasons.

1. Medical expenses

The number one reason given for declaring bankruptcy was medical expenses. It was given as the main reason by 62% of those surveyed, which isn't terribly surprising. It's not uncommon for people to get hit with medical bills in the hundreds of thousands of dollars that can quickly wipe out savings and even retirement funds. When these become exhausted, bankruptcy becomes a very attractive option. In fact, it may be the only choice left whether or not the family had health insurance that covered some of these horrendous costs.

2. Loss of job

The second reason given most often was job loss. Whether people were laid off, terminated or resigned, the result was the same - watching debts accumulate with no ability to pay them off until bankruptcy became the only option. To make matters even worse, many of these people had no emergency funds to tide them over.

3. Bad credit practices

Number three on the list of reasons why people declared bankruptcy was excessive use of credit. In other words, they simply didn't manage their credit sensibly. The sad fact is that some people just can't control their spending. They accumulate personal loans, credit card debt, car loans and other types of debt until everything spirals out of control and they are no longer able to make even the minimum payments on each type. And, unfortunately, debt consolidation plans fail for various reasons and these people also end up filing for bankruptcy.

4. Divorce or separation

Divorce can be costly for several reasons. First, there are the fees associated with the divorce itself, which can be huge - for attorneys, court filings, marriage counseling, etc. Then second is the splitting of assets and third, the cost of supporting two separate households. There can also be wage garnishments to cover back alimony or child support, that strip one of the two of their ability to pay their other bills. In other cases, one ex-spouse fails to pay the support that was agreed to in the divorce, leaving the other person practically penniless.

5. Unanticipated expenses

The number five reason for filing for bankruptcy is due to unexpected emergencies such as hurricanes, floods and fires when the homeowner does not have insurance to cover the costs associated with getting their lives back. In this case, people may not have just lost their homes but most or all of their possessions as well. They must spend money to replace these items, as well as finding immediate food and shelter. This can run up costs in the thousands of dollars, making bankruptcy these people's only real option.

Do you know your state's statute of limitations?

Many of these people who are seriously in debt are being hassled by debt collection agencies. If this is happening to you, you need to have the agency verify your debt. This means making them prove that you actually owe the money and they have the right to collect it. You need to make the debt collection agency provide you with information as to the date you incurred the debt, the name of the original creditor and, of course, the amount of the debt. Every state has a statute of limitations. You need to know what it is where you live. This is because if the age of your debt exceeds your state's statute of limitations, the collection agency can no longer sue you. It can hassle you but you won't need to worry about being sued.

The states with the shortest statute of limitations include:

Kansas

Mississippi

Alabama

Maryland

Delaware

South Carolina

North Carolina

Alaska

These states have three-years statutes of limitation on debts. In comparison there are states where the statute of limitations is seven-plus years. Included in this group are Iowa, Montana, Wyoming and West Virginia. Most states fall somewhere in between with statutes of limitations of five or six years. For example, Colorado, Arizona and Oregon have six-year statues of limitations while Oklahoma, Arkansas and Missouri cap the statue of limitations on debts at five years. As you can see, the statute of limitations varies a great deal from state to state and it's important you know what it is in yours.

Finding debt relief starts with a free debt consolidation quote

It doesn't really make any difference why you are struggling with debt - whether it's because of something you did or something that you had no control over. The bottom line is getting out from under that burden. There are reputable debt consolidation companies that have helped thousands of Americans do just that. We understand that no two individuals are alike nor are their debts. This is why we offer debt consolidation solutions custom tailored to each person's needs. It all starts with a free debt consolidation quote. There is no obligation and no upfront fees. In fact, if you don't get your debt reduced, you don't pay. Debt-related laws vary from state to state so we aren't able to operate everywhere. In the event you live in a state where we don't operate, we will recommend debt relief providers in your state or provide you with helpful support.